Restructing
Include Cost item under Operating expense section $300,000. Add an Extraordinary item section listing Loss from Operations of $3,000,000 less income
tax benefit; also include a Gain on expropriated asset for $1,000,000 less income tax expense. Allow for an adjustment on current year Cost of goods sold of additional cost incurred for
obsolete inventory costing $400,000. This is classified as a prior period adjustment which resulted in net income overstated
by being $50,000. Therefore, the beginning balance of Retained earnings must be readjusted by decreasing retained earnings for the sum of $50,000. List the Loss due to foreign currency translation of $200,000 under Other comprehensive
income section less income taxes benefit; also list unrealized Gains on investment securities of $180,000 less income tax expense. Income tax rate for all items affecting comprehensive income is computed at 40%.